Home and flood insurance costs rising across Colorado

The cost of homeowners and flood insurance is climbing across Colorado thanks, in part, to the fires and floods of 2013.

It's an issue more and more people are starting to notice as they receive renewals on their insurance. Seeing her costs rise by $300 came as a surprise to Josephine Hill of Pueblo County.

"My first reaction of course was shock," Hall described. "I'm on a fixed income which most people are."

Hill said she knew insurance rates would be affected by 2013's wildfires and flooding. However she was confused about her costs going up because she lives in a residential area with few hazards.

"That part should be taken into consideration," she said. "We didn't have the floods, we didn't have the fires."

Carole Walker with the Rocky Mountain Insurance Information Association said catastrophes across the state end up raising everyone's premiums for homeowners insurance, it's how insurance companies manage risk and the money to pay claims.

To be clear it is not just wildfires and floods that have driven up costs, wind or hail damage can also be blamed. Additionally a spike in smaller problems like burst pipes also push up premiums.

"How much more are they going to go up?" asked Josephine Hall. "We take what they give us, well that's not exactly what I think is the American way."

Walker said another difficult problem faces those paying for flood insurance, costs have been raised for that as well. The National Flood Insurance Program is $24-billion in the red, mainly due to the fact that the majority of policy holders live in high risk areas and thus submit more claims.

"They have been unable to spread the risk for flood insurance like they have for homeowners insurance," explained Walker. "Because people simply only purchase it if they live in higher risk areas and they're the ones that are going to use it again and again."

Further complicating the issue is the 2012 bipartisan Biggert-Waters Flood Insurance Reform Act, which was aimed at reducing the National Flood Insurance Program's debt by reforming risk assessments and raising premiums. Outcry about the higher costs lead to the passage of the Homeowner Flood Insurance Affordability Act to put a cap on the increase in premiums, it was signed into law last Friday. However, premiums are still going up for those living in high risk areas.